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Rail News: Financials

RailAmerica reports higher revenue, higher expenses in 3Q


Today, RailAmerica Inc. reported its financial results for the third quarter, which cover a period prior to when Genesee & Wyoming Inc. (GWI) assumed ownership of the company. GWI acquired RailAmerica (and its 45 railroads) on Oct. 1, deregistered and delisted its common stock, and placed control of the company in a voting trust until the Surface Transportation Board issues a decision on the transaction, possibly in the fourth quarter or in first-quarter 2013.

RailAmerica reported that third-quarter operating revenue increased 11 percent to $155.4 million, freight revenue rose 8 percent to $113 million and non-freight revenue jumped 21 percent to $42.4 million compared with third-quarter 2011 results. The operating revenue gain was driven by rate increases, a commodity mix change and higher volume, RailAmerica officials said in a prepared statement. Carloads rose 4 percent in the quarter to 214,357 units.

By sector, industrial products revenue increased 11 percent primarily due to automotive carload growth; agricultural products revenue inched up 2 percent as a result of increased export traffic destined for Asia; construction products revenue climbed 11 percent because of strong forest products and lumber traffic; and coal revenue dipped 1 percent even though volume rose 6 percent, they said.

Net income fell from $9.1 million, or 17 cents per diluted share, in the year-ago period to $5.9 million, or 12 cents per diluted share, in part because RailAmerica incurred transaction-related expenses of $16.6 million in the quarter.

Total operating expenses rose 24 percent to $133.7 million as purchased services costs leaped 164 percent — primarily because of professional services associated with the sale of the company — and labor and benefits costs increased 15 percent, RailAmerica officials said.

The operating ratio climbed 8.5 points to 86 primarily due to the high professional service expenses and the absence of federal track maintenance credits in the quarter, they said.

Contact Progressive Railroading editorial staff.

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